TY - JOUR
AU - Glaeser,Edward L.
TI - A World of Cities: The Causes and Consequences of Urbanization in Poorer Countries
JF - National Bureau of Economic Research Working Paper Series
VL - No. 19745
PY - 2013
Y2 - December 2013
DO - 10.3386/w19745
UR - http://www.nber.org/papers/w19745
L1 - http://www.nber.org/papers/w19745.pdf
N1 - Author contact info:
Edward L. Glaeser
Department of Economics
315A Littauer Center
Harvard University
Cambridge, MA 02138
Tel: 617/495-0575
Fax: 617/495-7730
E-Mail: eglaeser@harvard.edu
AB - Historically, urban growth required enough development to grow and transport significant agricultural surpluses or a government effective enough to build an empire. But there has been an explosion of poor mega-cities over the last thirty years. A simple urban model illustrates that in closed economies, agricultural prosperity leads to more urbanization but that in an open economy, urbanization increases with agricultural desperation. The challenge of developing world mega-cities is that poverty and weak governance reduce the ability to address the negative externalities that come with density. This paper models the connection between urban size and institutional failure, and shows that urban anonymity causes institutions to break down. For large cities with weak governments, draconian policies may be the only way to curb negative externalities, suggesting a painful tradeoff between dictatorship and disorder. A simple model suggests that private provision of infrastructure to reduce negative externalities is less costly when city populations are low or institutions are strong, but that public provision can cost less in bigger cities.
ER -